(Reuters) - Shares of Time Warner Inc <TWX.N> look appealing based on their underlying value and on the strong chance that AT&T Inc <T.N> will win approval for its $85 billion acquisition of the company, according to the March 26 edition of Barron's.

AT&T squared off with the U.S. Justice Department on Thursday in a long anticipated antitrust trial, as the two sides disputed whether the company's purchase of Time Warner would be good for consumers or an expensive drag on innovation.

Even if the government ends up winning and the deal dies, Time Warner shares might fall $5, but some analysts think they would quickly recover to their current value, given the company's earnings power, Barron's said.

Time Warner investors could end up even better off if the deal does not go through because the company's earnings power could support a higher stock price than the deal's current value, the newspaper said. It added that a Deutsche Bank analyst has a 12-month price target of $120 for the company on a stand-alone basis.